Beijing is quickly recognizing they have painted themselves into an economic corner. Beijing enables the DPRK. President Trump specifically targets this reality as the solution to North Korea’s aggression: ¹Beijing tells DPRK to do stupid thing. ²DPRK does stupid thing. ³Trump hits Xi Jinping with economic punishment for stupid thing.
In an effort to keep the panda mask as the primary focus of the international (investment) community; and facing another set of financial sanctions by President Trump and Secretary Mnuchin; and after President Trump explains to Xi Jinping that unrelenting economic pressure will only get worse; Beijing tells Chinese banks to cut off financial relationships with North Korea.
BEIJING/HONG KONG (Reuters) – China’s central bank has told banks to strictly implement United Nations sanctions against North Korea, four sources told Reuters, amid U.S. concerns that Beijing has not been tough enough over Pyongyang’s repeated nuclear tests.
Tensions between the United States and North Korea have ratcheted up after the sixth and most powerful nuclear test conducted by Pyongyang on Sept. 3 prompted the United Nations Security Council to impose further sanctions last week.
Chinese banks have come under scrutiny for their role as a conduit for funds flowing to and from China’s increasingly isolated neighbor.
The sources said banks were told to stop providing financial services to new North Korean customers and to wind down loans with existing customers, following tighter sanctions against Pyongyang by the United Nations.
The sources said lenders were asked to fully implement United Nations sanctions against North Korea and were warned of the economic losses and reputational risks if they did not do so.
Chinese banks received the document on Monday, the sources said.
China’s central bank did not immediately respond to a request for comment.
“At present, management of North Korea-related business has become an issue of national-level politics and national security,” according to the document seen by the sources.
The document directed banks to explain to any North Korean customers that “our bank is fulfilling our international obligations and implementing United Nations sanctions against North Korea. As such, we refuse to handle any individual loans connected to North Korea.”
The document did not specify whether existing North Korean account holders could still deposit or remove money from their accounts. (read more)